2. A contracting company is involved in a dispute over its bill to a customer....
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2. A contracting company is involved in a dispute over its bill to a customer. The bill for $500 000 was recently reduced to $400 000 by a decision of the courts. The company is now appealing the decision. a. Which amount should be taken into the accounts (recognized)? b. Which GAAP(s) affect this situation? Explain. 3. Six months ago, you closed out your business. Now, a person has expressed an interest in acquiring the business. The potential buyer requests a current balance sheet, but you provide her with the one that was prepared just prior to closing. a. Will the balance sheet be accepted by the buyer and her accountant? b. Which GAAP(s) affect this situation? Explain. 4. Martha Higgins is currently trying to borrow some money from the bank. She has listed her personal automobile ($25 000) on the business balance sheet to make the statement look more attractive to the banker. a. Is this a reasonable thing to do? b. Which GAAP(s) affect this situation? Explain
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